Vodafone Idea signs multi-million dollar IT deal with IBM for a hybrid cloud-based digital platform

India's largest telecom operator Vodafone Idea Ltd on Friday announced a five-year multi-million-dollar IT outsourcing deal with tech giant IBM.

"This engagement will also contribute to Vodafone Idea's merger synergy objectives by reducing its IT related costs," the telecom firm said in a statement.

The company did not divulge the size of the deal but some reports pegged it at about $700 million.

"The collaboration will provide Vodafone Idea with a hybrid cloud-based digital platform to enable more intimate engagement with its over 387 million subscribers (as of December 31, 2018), enhancing business efficiency, agility and scale plus simplification of its business processes," it said.

The new infrastructure platform will remove constraints to exponential growth of data usage driven by increasing consumption of video, streaming and digital commerce, the statement said, adding that it will also drive enhanced customer experience to millions of connected consumers and businesses in India.

"Vodafone Idea is collaborating with leading global technology partners including IBM to deploy new-age technologies with built-in customisations and novel innovations. We believe that the use of IBM's hybrid and multi-cloud analytics and AI security capabilities will accelerate Vodafone Idea's progression to an open, agile, and secure IT environment," the statement said.

The deal will also provide a platform for fast-track joint initiatives in artificial intelligence (AI) and internet-of-things (IoT).

"This five-year collaboration with IBM opens new opportunities for us to partner together in domains like cloud, AI, and IoT.

"We will also be able to leverage collateral from the cloud partnership already announced between Vodafone and IBM in Europe. Achieving synergies post-merger from the combination of Vodafone India and Idea Cellular is a strategic priority for us, and we continue to be ahead of track," Balesh Sharma, CEO, Vodafone Idea, said.

IBM is supporting Vodafone Idea with an option of extended flexible payment plan structure for the term of the contract through its wholly owned subsidiary, IBM Global Financing.

"IBM will continue to seamlessly deliver enhanced services for Vodafone Idea leveraging its prior capabilities with Vodafone India and Idea Cellular. It will consolidate applications, and infrastructure including data centers, disaster recovery centers, and further accelerate existing cloud usage," Vodafone Idea said.

The solutions deployed by Vodafone India and Idea Cellular earlier will be merged and enhance big data capabilities.

"Vodafone Idea will also leverage dynamic automation and Robotic Process Automation to drive efficiency and standardisation across IT operations. AI and machine learning based cognitive solutions aim to provide Vodafone Idea with a secure environment ensuring regulatory compliance, intelligent threat detection, and data protection," the statement added.

Commenting on the development, Karan Bajwa, Managing Director, IBM India said: "We are confident that our industry expertise coupled with hybrid cloud, data analytics and AI capabilities will help VIL (Vodafone Idea) deliver significant customer experience and service value".

Meanwhile, analysts noted that large operators like Vodafone Idea and Bharti Airtel are ploughing in massive investments to augment their network capacities and make their infrastructure future-ready.

"However, we estimate that India's total wireless data usage will reach 13 exabytes/month by 2025, which is 5 times that of current data usage. This explosion in data usage would be led by by rising penetration of smartphones, availability of high speed internet at affordable tariffs and shift in media viewership to online platforms from traditional medium," Prashant Tarwadi, Director, India Ratings and Research said.

Tarwadi added that the existing 4G technology and network capacities may be inadequate to meet such high data demand, and so a mix of fiberisation and along with complementary high speed 5G wireless technology would be needed.

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